Even as the global startup ecosystem begins to talk about a slowdown in dealmaking due to macroeconomic challenges, Indian companies raised more than $10 billion in the first quarter of 2022, up from $5.7 billion in the same time of 2021, according to Venture Intelligence statistics.
Because official deal announcements often take a few months after closing, the record-breaking first quarter funding data does not account for the present downturn.
A rise in US interest rates, rising geopolitical tensions as a result of Russia’s invasion of Ukraine, record-high fuel prices, and a drop in US tech stocks have all contributed to late-stage and private equity investors becoming apprehensive globally.
According to a story in the Financial Times, SoftBank’s founder, Masayoshi Son, recently advised the company’s top leadership to take it easy on technological expenditures owing to a stock market fall (FT).
His statements come as the Japanese investor is ‘pressing for cash and reviewing assets that could be liquidated.’
Rajeev Misra, the CEO of SB Investment Advisors and the chairman of SoftBank Vision Fund, told earlier this month that private financing will be limited this year, compared to 2021 and 2020.
In India, however, late-stage deals accounted for 45% — $5.8 billion of total funding into the Indian startup ecosystem this quarter.
The true impact of geopolitical tensions and macroeconomic events, according to investors and founders, may become evident in the next quarters. For the time being, Indian startups are riding high on the success of the previous year.
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